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Nexperia Invests $200M To Expand In Europe

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Reports say this investment stands out as it was made without relying on state subsidies provided under the EU’s Chips Act introduced in 2023.

Last week, Nexperia, a China-owned basic semiconductor company headquartered in the Netherlands, announced a plan to spend $200 million to increase production capacity at its primary manufacturing facility in Hamburg, Germany.

The funding has been regarded as a unique instance of a computer chip investment in Europe that does not rely on state subsidies from the EU’s Chips Act, introduced in 2023.

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Through this investment, Nexperia intends to install production lines in Hamburg for two types of ‘wide bandgap’ chips, using Silicon Carbide (SiC) and Gallium Nitride (GaN). 

These chips are preferred over standard silicon chips due to their efficiency, speed, lightweight nature, and capability to operate effectively in high-temperature and high-voltage conditions.

This announcement was made right after the European Union started investigating China’s potential unfair subsidies for traditional chips used in European products like those from Nexperia.

Since Chinese company WingTech acquired Nexperia for $3.6 billion in 2018, the Nijmegen, Netherlands-based company has faced increasing scrutiny from European governments. In 2022, the British government required Nexperia to sell a factory in Newport due to security concerns.

Although the Dutch government approved Nexperia’s business activities last year, the German government excluded Nexperia from receiving a subsidy for developing battery efficiency technology.

Nexperia manufactures approximately 100 billion of these chips annually, accounting for nearly a quarter of the global supply. The company conducts production in Europe, while assembly and packaging occur in China, Indonesia, and the Philippines.

In 2017, the company was separated from NXP, formerly Philips’s chip manufacturing division. It competes with Texas Instruments, Infineon, and NXP in the automotive market, with approximately 10% of its sales going to customers in China. 

According to the CFO, Stefan Tilger, Nexperia chips play a vital role in electric cars, green energy, and digitalisation, essential for advancing new technologies.

Nexperia’s advocacy chief, Hannes van Raemdonck, told Reuters that the company has ambitious growth plans. He noted that Nexperia is investing to capitalise on trends such as electrification and the growing demand for automobile semiconductors.

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